Spa-Tacular

If you want to add a spa to your existing fitness facility or perhaps expand upon the spa services that you currently do offer — where do you begin? While many fitness and wellness-oriented facilities have added spas to their programming mix over the last decade many others have failed or their spas have produced mediocre results. Like abandoned stepchildren spas are often ignored and eventually done away with. The deep, hidden truth is your spa can be making up to 28 percent in revenues if created and managed correctly. We have created a list of what to do if you are thinking of adding a spa to your facility.

TOP TEN LIST

If you aren't prepared to do it right to begin with forget it.

So many fitness facilities add spas as if they are amenities or programs that will manage themselves. Nothing in your club just makes money on its own without internal promotion.

“Spas can be very profitable and oftentimes perform well if they are treated like a business and internally marketed. You can't just put a spa in your club and assume that it is going to be instantly successful,” Ed Williams, CEO of Wellbridge located in Denver says. “You have to treat it like any other specialty part of your facility. It is like a tennis program or an elaborate aquatics program and it has to be individually marketed.”

Williams, who oversees the country's third largest club management team, says that many of his facilities generate 20 percent of the overall revenue from their spa.

“Of course, some locations simply can't support a strong spa showing demographically, but many of our spas in clubs are extremely profitable,” he says. “You have to remember that it is a business within a business and that you have to give it some time to perform. You have to be willing to give your spa money for marketing and some time to grow. Also, you can't just add a small space, call it a spa and expect it to do well. If you really want to add a spa take the time to invest in it and then work with it to make it grow.”

Stick to treatments that are classics.

In the spa realm at the moment the two top sellers are massage and facials respectively. Many destination resorts and day spas have chosen to add more exotic treatments like Asian therapies, energy balancing and meditative offerings to their mix. While this has worked for some spas, in fitness, this diverse selection has not done well.

“As destination spas we have been able to integrate therapies into our menu that are rather esoteric. Guided imagery, tarot readings, labyrinth work all compliment nutritional counseling, fitness and a variety of spa services including hydrotherapy,” says Doug Wilson, director of corporate projects for Canyon Ranch. “While this broad base of offerings has been well received in our Tucson and Lenox locations, this kind of treatment programming has not worked at our day spa locations like the spa at the Venetian in Las Vegas. Their needs and interests are much different than a client coming to one of our destination properties for a weeklong stay.”

Wilson's advice for club owners is to interview existing members and find out what they are interested in. “Before you plan a Kneipp pool or a Watsu pool, for instance, build out some simple but flexible treatment rooms. The water therapies are probably not going to be as popular and the equipment and space build out for those types of services can be quite costly,” says Wilson.

“Build out a space that can accommodate the percentage of members you think you will be seeing at the spa over the first three years and plan the area so that later expansion won't be a problem.”

Perform a proper feasibility study and business plan.

Often, fitness facilities make the mistake of putting a spa in without understanding what their membership will support, according to Joe Conant, principal at INOVA group.

“You must do a few basic things in order to assure that the spa will be successful. Calculate your investment and return on investment before you begin building your spa. If it looks like the spa won't be profitable either re-evaluate the project or don't build it. If it will eventually generate a profit be conservative about when you expect it to become profitable and budget accordingly,” says Conant.

“Just because your club is successful that doesn't mean that your spa will also be successful. Take the time to create a specific plan for your vision of the spa and then give it time to mature.”

Allow your staff open access to the spa.

Internal marketing isn't effective if most of the staff at the club hasn't set foot in the spa. By allowing your front desk team, aerobics instructors, aquatics staff and personal trainers to enjoy discounted spa services, they will be much more apt to market the spa. Furthermore, promote spa specials to the staff in newsletters and hold monthly meetings to discuss the correlations between new fitness programming, group exercise and equipment in the club and how that can be marketed along with spa treatments. Finally, put your staff on a small commission for referring the spa. Hold contests for referring spa treatments and consider giving department bonuses for spa referrals.

Don't try to be everything to everyone.

Karen Kennedy, spa manager at LA Splash located in New York City, warns that many of the standard offerings of a full-service salon are not going to be popular in a fitness facility.

“It really depends on your clientele and location. We tried offering hair and nails services and it just didn't work. The spa was by far more popular,” comments Kennedy. “We really see our cash cows as being massage and basic aesthetic treatments like facials. In the beginning though we focused on competing with local day spas. We have since discovered that a fitness spa is a unique entity and truly must cater to the needs of members. We also have found that the treatments need to tie into fitness and be more unisex than stand-alone spas.”

Don't treat the spa as a mini-club.

Along the same lines, Kennedy advises that the spa must have technicians and licensed professionals that are skilled and experienced in what they do. Simply having your club manager also oversee the spa is unwise.

“It is important that the general manager of the club and the club's administrative staff work together to create a cohesive experience, but don't think that you will not need a separate infrastructure for the spa,” Kennedy says.

“The spa staff is made up of different kinds of people with different skill sets than the club and spa clients have different expectations of a spa than they do of the general fitness facility. Don't lose site of how the spa functions as a separate business as well as how it ties into the overall business.”

Don't forget marketing. In fact, if you forget marketing the spa, forget about the spa entirely.

Danielle DeVaux, general manager of the Peninsula Spa in Chicago, says that marketing to its list of members through direct mail and promotions is invaluable.

“If we didn't market the spa the way we do we definitely would generate less sales. Facial and massage promotions are among our strongest,” says DeVaux. The spa, which generates an average ticket of $115 per client visit, sees a strong correlation between marketing pushes to their preferred client list and monthly sales. “We promote specific retail lines, seasonal services and more interesting twists on classic treatments like stone massage or anti-aging facials.”

Internal marketing that has worked for the Peninsula include referral programs, shelf-talkers, retail sales promotions that tie in with treatments and direct mail. “Although roughly 50 percent of our clients are from out of town, given our marketing techniques our percentage of returning clients remains high,” she adds.

If you aren't prepared to manage the spa, hire it out.

At the Paul Lebrecque Salon and Spa in the Reebok Sports Center in New York City the spa is owned by a separate company from the fitness center.

“Because the nature of our business is so specific and so focused, we can offer spa clients better service for what we do best, which is beauty treatments,” says Brian Cantor, general manager of the spa. Cantor adds that the spa has access to a higher grade of technician, can offer more comprehensive training programs and that years of experience in the professional beauty industry makes for a more efficiently run facility.

“Our profit margins are higher, our clients are happier and our employees are the best in the business,” says Cantor, who advises to absolutely hire a team that is separate from the facility management team and staff even if the spa is company owned. “Find the best at what they do and then give that team of technical experts the room to create programs, offer services and provide excellent customer service.”

Have a comprehensive retail line.

So many clubs have spa services and then forget retail entirely. Having a product line that fits in with the style of the club as well as selling the products used during treatments can be enormously valuable. In fact, some spas sell dollar for dollar retail sales to service sales meaning that when a client receives a $95 facial they also typically purchase $95 worth of homecare products to continue the results achieved during the professional treatment in the spa.

The rule of thumb with retail is to carry a couple of lines that are strongly branded, appropriate for the climate of the facility and that have price points in the range of the target market being served. Many spas also have signature lines that are private labeled that carry the name of the facility or spa. Some private label lines have a separate name from the spa but are still unique to that business. Either way, the profit margins on private label tend to be three to four times higher than the profit margins on brands.

Focus on healthy, truly therapeutic treatments.

Marjorie Johnson, coordinator of the Spa Certificate Program at the Boulder College of Massage Therapy in Colorado, suggests that if the spa will be offering a full range of spa services, they consider offering more European, traditional and medicinal therapies.

“Thallassotherapy involving seaweed and seawater, pelotherapy — therapy using medicinal mud and hydrotherapy or treatments involving the use of water — are all treatments that many spas in the United States overlook. In sports and fitness settings, however, they can be useful in treating injuries, arthritis, repetitive use conditions and overworked muscle tissue,” says Johnson.

Since massage is overwhelmingly the most popular treatment in most health clubs, introducing more advanced treatments to massage clients is a natural fit.

“Treatments involving increasing circulation, detoxification of the lymphatic system, toning the physique with minerals and herbal solutions all help to decrease exercise recuperation time as well as support well-being, relaxation and state of mind,” says Johnson.

Johnson notes, though, that each club must be responsible for following their state's laws with regard to medicinal-grade treatments and be following their state's Board of Cosmetology rules and regulations she thinks that well-trained spa technicians who understand the benefits of more serious services are a real boost to a spa located in the health club.

“Remember to refer to the benefits of the body and not just the beauty aspects,and don't forget to include men in your programming,” she notes.

The good news is that health clubs all over the country have made mistakes with their spa additions that it is becoming more obvious how to create a successful spa in a health club setting. Above all, before venturing into adding a spa, have a plan, hire spa experts and take the necessary time to do it right the first time.

More on Massage

Massage is the most popular service in health clubs hands down. Are you really making money from massage, though?

The answer is probably not. Massage is an incredibly easy service to offer. Put a massage therapist with a $300 massage table in an 8 × 10 room and let clients know that they can receive a massage at their whim. This all seems so simple. However, once you have paid the therapist the average of 50 percent commission with an additional 20 percent of their gross pay being added in for payroll costs, benefits, etc. Include general operating costs for everything from paying someone to answering the phone to square footage facility cost to laundry and your profit center begins to dwindle.

Consider the fact that massage almost never produces meaty retail sales and that massage typically doesn't produce add-on service sales the way aesthetic services do. The conclusion is you may be doing a lot of massage but it almost certainly is not generating a great deal of net revenue.

How do you fix this? Think twice before you pay anyone straight commission for a service period. That sort of pay structure is a dead end financially. Introduce retail products that are directly linked to massage like therapeutic bath salts, self-massaging items for home use and oils that nourish the skin and work on deep muscle tissue. Tie aesthetics services into massage therapy services so the client is more apt to experience more than just a massage at the spa. Create programs that encourage retention and regular visits by the client like a frequent spa-goer program.

Common Mistakes When Adding a Spa

Placing the spa in an inappropriate space. While it is wise to try to use the locker rooms and aquatics area to compliment the spa, sticking random massage rooms in the locker rooms never makes sense.

Forgetting about the spa. If you don't let members know about the spa they won't use it and it won't produce a profit.

Not having a plan. From creating the wrong-sized rooms to wet rooms that are sure to flood every aspect of your spa needs to be planned out by a professional. Treatment protocols that don't appeal to your market and treatments that are so specialized that your staff will need expensive, ongoing training are also common mistakes.

Insufficient staffing. You wouldn't allow a front desk person who can't swim to manage your aquatics program, so why would you allow your general manager to manage your spa? While it is wise to allow your fitness management to oversee aspects of the spa at the very least appoint a licensed professional with years of experience to manage the inner workings of your spa.

Expecting an instant profit. Spas are long-term investments and take two to three years to show strong earnings. If your facility can't wait for your spa to turn a profit in a reasonable amount of time as opposed to overnight — don't build one.